Bayshore’s vacancies mount as redevelopment ramps up
Around 40 commercial spaces remain empty
Glendale’s Bayshore development has around 40 vacant commercial spaces — but a revitalization effort that’s ramping up aims to change that picture.
So far, that work includes improvements to Bayshore’s town square, which are to be done by June, as well as renovating one large vacancy — the former Sports Authority —into what is expected to become a Total Wine and More store.
Meanwhile, the relocation of tenants from Bayshore’s older portion, including its food court, is nearly done. Demolition of that building will begin in March after the last two businesses move out.
Finally, plans to develop around 300 apartments and a 100-room hotel on parcels created by razed buildings are proceeding, with construction to begin by year’s end, said Kirk Williams, managing director at Dallas-based Cypress Equities, which is overseeing the project.
“We’ve got a plan. We’ve got capital. And the market is responding,” Williams told the Journal Sentinel.
That response includes an agreement
with an apartment developer to build market-rate units within perhaps four to five mid-rise buildings, Williams said. Those buildings would be developed in phases.
Also, another developer has agreed to buy a parcel for the hotel, which would be a four-story building, he said.
Cypress isn’t yet disclosing the names of those developers and additional details on the proposed apartments and hotel. Those projects will need city design approval.
The hotel, apartments, possible medical offices and open space are to
be on parcels created by the demolition of the old mall, the former Sears store that was demolished in 2017 and a partial demolition of the former Boston Store building.
There’s also empty space between North Lydell Avenue and a mall parking structure.
The two-story former Boston Store will be reduced from around 130,000 to 40,000 square feet, Williams said. That smaller space is to be filled with offices, stores and restaurants.
Meanwhile, vacancies in Bayshore’s newer buildings, created when the mall was last redeveloped in 2006, are being marketed to prospective tenants.
Those prospects will have a lot of options.
A recent walk around Bayshore found around 40 empty spaces — although some are in the area that will soon be torn down.
That growing number is worrisome, said Dick Seesel, who operates Mequon-based consulting firm Retailing in Focus LLC.
Bayshore’s redevelopment strategy makes sense, Seesel said. But the pace of retail closings appears to be accelerating, he said.
“It seems like it’s a race against time,” Seesel said.
Most of the empty spaces are former stores.
But there are also former restaurants, the shuttered iPic theater/ bowling alley and vacancies in two newer office buildings — including one still left from the L.A. Fitness closing in 2015.
Recent closings include Devon Seafood + Steak, which went dark in November; Forever 21, which closed Dec. 29; Bar Louie, which shut down on Jan. 25 and Chico’s and White House Black Market, which both closed Jan. 26.
Also, office tenant Regus, which provides short-term office space and administrative support services to businesses, said it will close in March.
Those come on top of closings earlier in 2019 that included American Eagle, Shaw’s Jewelers, Hom Wood Fired Grill and Sprecher’s Restaurant & Pub, as well as Applebee’s.
Those closings are generally tied to store and restaurant chains that have seen declining business — and sometimes bankruptcies — throughout the country, Williams said.
“None of this caught us by surprise,” he said.
The problem isn’t with Bayshore’s location,
which draws shoppers from the North Shore suburbs as well as Milwaukee’s north side, Williams said.
It’s a matter of updating Bayshore to reduce its reliance on stores and instead become a true mixed-use development with more apartments, a hotel, entertainment
venues and more attractive public areas, he said.
The changes will include murals and other art, better pedestrian connections, more landscaping and a new outdoor plaza between Bayshore’s rotunda and the parking structure to its east. The rotunda is adding escalators removed from the former Sports Authority store.
When all the work is done, Bayshore’s retail portion will shrink from 830,000 square feet to 520,000 square feet.
That 37% contraction will help Bayshore increase its retail occupancy rate, which Williams declined to disclose.
Also, the marketing efforts include a focus on local and regional restaurants and retailers, with less emphasis on chains. Cypress also is talking to prospective co-working office space users, Williams said.
Seesel, however, said Bayshore still needs additional national retailers, such as Nordstrom Rack or other offprice chains.
“They need some other powerhouse tenants in there,” said Seesel, a former Kohl’s Corp. executive.
A big part of the project is Bayshore’s revamped town square, which is to be done by mid-June. Its first event, the 11th annual Wisconsin Beer Lovers Festival, is scheduled for June 20.
“We want to get that one done right,” Williams said. “And we want to get it done sooner rather than later.”
The town square’s sunken fountain is being replaced with artificial turf, more seating, public art and a large LED screen for sports events and other broadcasts.
The idea is to encourage Bayshore patrons to stay longer for shopping, dining and other activities.
The redevelopment project’s financing includes a $105 million loan from Pimco, a Newport Beach, Californiabased investment fund manager.
Also, the city will provide up to $37 million to help finance the redevelopment. That money will come from Bayshore’s property tax revenue — but only if new buildings are developed.
In return, Bayshore’s owner, an investors group that includes Cypress and New York-based American International Group Inc., paid off Glendale’s remaining Bayshore tax incremental financing debt of $57 million.
The city took on that debt when it helped pay for the 2006 creation of what was then named Bayshore Town Center. That project combined the old Bayshore Mall with several new buildings, parking structures and a street grid.
The city wouldn’t have been able to pay off that debt with Bayshore’s existing property tax revenue.
That’s because Bayshore’s value has declined steeply as retailers, including anchors such as Boston Store and Sears, have shut down.
Bayshore’s assessed value was $310 million until 2019 — when it was slashed to $65 million. A revamped Bayshore could have property values totaling more than $200 million, according to the city.
Mayor Bryan Kennedy hears from Glendale residents who are concerned about the growing number of vacancies amid the redevelopment effort.
His message: Bayshore’s redevelopment is a long-term strategy.
“What happens tomorrow, or next week, is not necessarily indicative of where Bayshore is going to be in two or three years,” Kennedy said. “Give it time.”
Longtime Bayshore tenant Aexander Groysman believes in the plan.
Groysman operates Bayshore Tailor, which recently relocated within Bayshore out of the old mall portion. His shop has operated at Bayshore for 36 years.
“I wish them success,” Groysman said. “All the people who live in this area, they need the mall.”